All of the following are examples of negative externalities except
a. getting the flu vaccine.
b. smoking in a crowded bar.
c. driving while intoxicated.
d. littering in the park.
e. pouring paint down the storm drains.
A
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Joe is maximizing utility by consuming three colas at $2 apiece and four hot dogs at $3 apiece. The last cola gave him 200 units of utility. How many units of utility did the last hot dog give him?
A. 300 B. 133.33 C. 600 D. 10
Calculate the internal rate of return for a machine that costs $500,000 and provides annual revenue of $115,000 per year for 5 years. You can assume all revenue is received once a year at the end of the year.
What will be an ideal response?
For two goods, X and Y, to be classified as substitutes, it must be the case that:
A. consumers tend to purchase both items together. B. when the price of X rises, the demand for Y increases. C. X and Y are identical. D. when the price of X rises, the demand for Y decreases.
Mechanism design is used to
A. give individuals the incentive to reveal the truth about themselves. B. correct inefficiencies associated with asymmetric information. C. align the interests of two parties in a transaction. D. All of the above are correct.